Correlation Between Fortress Transp and Eastern
Can any of the company-specific risk be diversified away by investing in both Fortress Transp and Eastern at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fortress Transp and Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transp Infra and Eastern Co, you can compare the effects of market volatilities on Fortress Transp and Eastern and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fortress Transp with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and Eastern.
Diversification Opportunities for Fortress Transp and Eastern
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortress and Eastern is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and Fortress Transp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fortress Transp Infra are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Fortress Transp i.e., Fortress Transp and Eastern go up and down completely randomly.
Pair Corralation between Fortress Transp and Eastern
Given the investment horizon of 90 days Fortress Transp Infra is expected to generate 0.79 times more return on investment than Eastern. However, Fortress Transp Infra is 1.26 times less risky than Eastern. It trades about 0.2 of its potential returns per unit of risk. Eastern Co is currently generating about 0.04 per unit of risk. If you would invest 2,010 in Fortress Transp Infra on August 31, 2024 and sell it today you would earn a total of 14,872 from holding Fortress Transp Infra or generate 739.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Transp Infra vs. Eastern Co
Performance |
| Timeline |
| Fortress Transp Infra |
| Eastern |
Fortress Transp and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Transp and Eastern
The main advantage of trading using opposite Fortress Transp and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp position performs unexpectedly, Eastern can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eastern will offset losses from the drop in Eastern's long position.| Fortress Transp vs. HE Equipment Services | Fortress Transp vs. GATX Corporation | Fortress Transp vs. McGrath RentCorp | Fortress Transp vs. Alta Equipment Group |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. Kennametal |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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